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Bitcoin (BTC), the world's oldest and largest blockchain, has long been regarded as the most secure platform in the cryptocurrency industry for asset transfers and storage. Over the last few years, innovations such as Bitcoin Ordinals, Runes tokens and the BRC-20 standard have further contributed to the chain's ecosystem diversification. However, despite its status as the industry leader and benchmark, Bitcoin suffers from several significant limitations, including poor scalability, network congestion and rising transaction fees.
Fractal Bitcoin (FB) is a Layer 2 platform that builds directly on Bitcoin's technical foundation, Bitcoin Core, to address the issues of the blockchain's limited scalability and transaction inefficiency. Using an architectural setup known as recursive virtualization, the Fractal project aims to improve the scalability and efficiency of Bitcoin transactions without compromising the blockchain's famed security and decentralization advantages. Fractal could potentially be a key evolutionary development for the broader Bitcoin ecosystem as it's the first Layer 2 solution that directly leverages the blockchain's core technology without being a fork of it.
Key Takeaways:
Fractal Bitcoin (FB) is a Layer 2 sidechain for the Bitcoin network that offers excellent scalability and transaction efficiency, thanks to its multi-layer recursive virtualization technology.
Fractal's native cryptocurrency, FB, is primarily used to mine reward payouts and transaction fee payments on the Bitcoin blockchain.
Fractal Bitcoin (FB) is a Layer 2 Bitcoin scaling solution designed to enhance Bitcoin's scalability and extend its functionality while maintaining its core security and decentralization benefits. Set up as a sidechain platform, Fractal directly leverages the Bitcoin Core code.
Fractal Bitcoin uses recursive virtualization technology in its architectural setup to offer multiple layers that operate independently while remaining connected to the Bitcoin network. It's the first and only Bitcoin scaling solution that applies virtualization within the Bitcoin ecosystem. Each layer operates independently, leveraging Bitcoin's underlying consensus mechanism. This ensures that Fractal is capable of offering its scalability benefits without sacrificing the security of transactions.
Layers can be spun off as needed, creating a truly flexible and scalable platform for conducting Bitcoin transactions. Additionally, Fractal's sidechain supports smart contract functionality, opening the way to using decentralized apps (DApps) within the Bitcoin ecosystem.
The project launched its mainnet operations in September 2024. It's been developed and is actively supported by the team at the UniSat Wallet project, a crypto wallet solution for the Bitcoin ecosystem.
Fractal Bitcoin's core technology is based on recursive virtualization. Virtualization, in general, lets you create virtual instances of a system, in this case virtual replicas of the Bitcoin chain. “Recursive” indicates that these virtual instances (or layers, using the project's terminology) can be created continuously, launching layers that operate independently of each other. In theory, this allows Fractal to scale unlimited layers recursively within the overall technical capacity restrictions of the platform.
Each virtual layer runs its own processes without clogging up the main Bitcoin network. The layers are designed to process each transaction block in 30 seconds, which is considerably faster than Bitcoin's own 10-minute block intervals.
The use of virtualization as a scalable computing system, along with the smart contract capabilities of the Fractal Bitcoin platform, enables a variety of use cases, including solutions in decentralized finance (DeFi), gaming, supply chain management and more.
Fractal has also integrated support for the CAT20 token standard. CAT20 lets Fractal developers create fungible tokens with high levels of built-in security, adherence to Bitcoin's consensus, compatibility with the blockchain's native unspent transaction output (UTXO) model and the capacity to support complex composable transactions.
Fractal also supports three highly popular Bitcoin asset types: BRC-20 tokens, Runes tokens and Bitcoin Ordinals. Users and issuers of these assets can take advantage of Fractal's superior scalability and quick confirmation times, a key consideration given the frequent complaints about these tokens’ activity congesting the Bitcoin network.
BRC-20 tokens are fungible Bitcoin assets created by inscribing token data into Bitcoin satoshis, the smallest units of a Bitcoin. Introduced in March 2023 and based on Bitcoin Ordinals theory, BRC-20 tokens are commonly created as meme coins. Fractal Bitcoin fully supports this token standard on its own platform.
However, Fractal's BRC-20 tokens have to follow a somewhat different naming standard from the one used by BRC-20 assets issued directly on Bitcoin. These differences primarily relate to ticker names being limited to 6–12 bytes, and rules governing what characters may be used for the tickers. In terms of their functionality, Fractal-based BRC-20 assets are similar to their Bitcoin-based counterparts.
Runes are another highly popular fungible token variation on Bitcoin. Unlike BRC-20 tokens, Runes don't use Ordinals inscription methodology, and are instead based on Bitcoin's native UTXO model. Thanks to this distinction, Runes are considered a more lightweight, low-footprint way of issuing and using Bitcoin-based fungible assets.
Fractal Bitcoin directly supports these assets as well, and Fractal-based Runes are etched, minted and used in the same way as on Bitcoin to create a familiar environment for Runes enthusiasts. Unlike BRC-20, Runes tokens' tickers on Fractal are no different from the naming standards used on Bitcoin.
Ordinals inscriptions, a technology that has enabled Bitcoin-based NFTs, are also available on Fractal, and in the same format as on the Bitcoin blockchain. One user-friendly way to create inscriptions on Fractal is through the Fractal Bitcoin wallet on the UniSat platform.
The UniSat Wallet extension features a step-by-step procedure that makes issuing Fractal Ordinals inscriptions accessible even to users with no understanding of the technical details behind this technology. You can also trade these assets via the UniSat Marketplace on Fractal.
The Fractal Bitcoin platform was created by the UniSat team, so it's no wonder that the UniSat Wallet is the primary vehicle for navigating the platform's ecosystem and carrying out transactions on it. The UniSat Wallet supports the issuance of BRC-20 tokens, Ordinals collections and even Names — inscriptions designed to register simple, human-readable identifiers on Bitcoin.
As noted earlier, the wallet also provides access to the UniSat Marketplace on Fractal, where any asset type supported by the wallet can be easily traded. In addition, the wallet supports inscription-based assets — BRC-20 tokens, Names, Ordinals Inscriptions — directly on Bitcoin.
Fractal's native crypto token, FB, can be merge-mined along with Bitcoin. The platform uses a mining methodology called Cadence Mining, a type of hybrid mining that enables miners to validate blocks on Fractal while also contributing to the security of the Bitcoin chain without needing additional resources.
To participate in FB mining, you need to use specialized machines called ASIC miners, and preferably join a mining pool to improve your chances of earning rewards. You’ll also need to set up a Bitcoin address via the UniSat Wallet, to which your mining rewards can be sent.
Note that in Fractal's mining system, only one-third of blocks are mined in a merged format with Bitcoin. The other two-thirds are mined entirely on Fractal Bitcoin in a permissionless manner by switching the mining machine's resources entirely to the Layer 2 chain.
The standard mining reward on Fractal (valid since the launch of the chain's mainnet in early September 2024) is 25 FB (around $165). Although this is vastly lower than Bitcoin's reward of 3.125 BTC (currently worth $194,977), Fractal's mining difficulty is also a lot lower than Bitcoin's. This means that the frequency of successful block mining on its sidechain is likely to be significantly higher than on Bitcoin. The frequency of successful mining is also boosted, thanks to Fractal's 30-second block intervals vs. Bitcoin's 10-minute mining cycles. The lower difficulty also creates opportunities for miners whose machines aren't powerful enough to mine BTC.
Like BTC, FB's issuance via a proof of work (PoW) mining procedure is subject to a halving rule. While the Bitcoin mining reward is halved approximately every four years, Fractal halvings are designed to take place every two years. The Fractal Bitcoin chain's mining reward is scheduled to reduce to zero some time in 2042.
Fractal Bitcoin’s native cryptocurrency, FB, is used much in the same way as the BTC coin is utilized on Bitcoin. FB serves as an asset to reward miners for helping to secure Fractal’s network. It's also used as the chain's primary asset for transactions and value storage. For instance, items listed on the UniSat Marketplace can be traded using FB coins.
FB's tokenomics also follows that of BTC quite closely, with a supply cap in place and the mining procedure used to gradually increase total supply. The maximum supply for FB is specified at 210 million, with half the supply allocated to mining rewards. Overall supply distribution shares are indicated in the chart below.
In early September, just before its Mainnet launch, Fractal airdropped 1 million FB to eligible UniSat and OKX wallet users.
The FB coin is available on Bybit as a Perpetual contract with USDT (FBUSDT). Perpetual contracts are derivatives with no expiration or settlement date.
Under the contract, you can trade FB with up to 12.5x leverage. Please note that FB is also listed in the Innovation Zone, which offers potentially higher returns with associated higher risks.
To trade FB as a Perpetual contract, you can head to the Trade tab on the Bybit official homepage, then navigate to Futures and choose FBUSDT from the menu. If you don't have a Bybit account, you can easily sign up for one to trade from hundreds of cryptocurrencies and crypto products available on Bybit's Spot and Derivatives markets.
As of Oct 10, 2024, the FB coin is trading at $6.60, or 83.1% lower than its all-time high of $38.80 on Sep 15, 2024, and 2.5% higher than its all-time low of $5.70, recorded earlier on Oct 10, 2024.
Despite its recent faltering price levels, long-term price forecasts for FB are largely bullish. DigitalCoinPrice predicts a maximum rate of $16.87 in 2025 and $49.50 in 2030, while CoinCodex expects FB to surge to a high of $30.69 in 2025 and soar to $42.59 in 2030.
The Fractal Bitcoin network is the first and only native scaling solution completely based on the underlying technology and code of the Bitcoin main chain. This creates opportunities for DApps, along with use cases that are tightly aligned with Bitcoin's own environment and ethos. Recursive virtualization is a unique approach that further sets this project apart in the world of Bitcoin-focused Layer 2 solutions. Virtualization as a scalability- and compatibility-enhancing solution has been around for decades, and long predates blockchain technology itself. The team at UniSat are the first to ingeniously recognize virtualization's great potential for blockchain, specifically for Bitcoin.
Fractal Bitcoin is still a new project, in the early months of its market presence. As Fractal gradually extends its reach to attract more Bitcoin enthusiasts and projects, we’re likely to see a growing appreciation in the industry for the platform's innovative architectural approach.
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